Payments Snapshot in Netherlands: Coronavirus (COVID-19) Sector Impact
The Coronavirus (SARS-CoV-2) outbreak, dubbed COVID-19, is first and foremost a human tragedy, affecting millions of people globally. The contagious Coronavirus, which broke out at the close of 2019, has led to a medical emergency across the world, with the World Health Organization officially declaring the novel Coronavirus a pandemic on March 11, 2020.
According to the IMF, the Dutch economy will shrink by 7.5% in 2020, with the unemployment rate set to hit 6.5%. The Bureau for Economic Policy Analysis estimates that the pandemic may cause a 7.7% decline in the countrys GDP, more severe than the 2008-09 global financial crisis. This severe economic disruption is expected to impact the countrys payments industry.
In response to the economic fallout of the COVID-19 outbreak, the government announced a series of measures on March 17, 2020. To support businesses that are struggling to pay their employees, the government is offering to pay up to 90% of employees' wages for three months, depending upon the amount of lost revenue businesses have incurred. The government is also allowing businesses to defer their income tax, corporate income tax, wage tax, and value-added tax payments for three months. The interest on overdue tax payments was temporarily reduced from 4% to 0.01%.
This report focuses on the impact of the Coronavirus outbreak on both the economyand the cards and payments industry in the Netherlands. Based on our proprietary datasets, the snapshotprovides a detailed comparison between pre-COVID-19 forecasts andrevised forecasts of total payment card, debit card, and credit and charge card transactions by value and volume. It also offers information on measures taken by the government to combat Coronavirus.
- Coronavirus will have a profound effect on the country's retail and hospitality industries due to reduced consumer spending. As per GlobalDatas 2019 Banking and Payments Survey, food and drink accounts for 29.1% of the countrys total debit card transaction value. Payment companies will see their revenue impacted by reduced overall consumer spending - particularly those with the most exposure to the food and hospitality sectors.
- Although there will be an overall rise in debit and credit card transactions in 2020, the pandemic is set to hamper growth and will cause a shift in consumer spending behavior, as wary customers will cut down on purchases of non-essential items. According to ING Bank, the total number of debit card payments made during the two weeks to April 20, 2020 decreased by 26% compared to the same period of the previous year. The largest decline was observed in outside leisure activities (72%), followed by clothing and footwear (71%), and transport (43%).
- Contactless payments are expected to surge as wary customers are increasingly adopting contactless to avoid exposure to disease vectors. According to ING Bank, 71% of the its debit card payments made during the one week to April 12, 2020 were contactless, compared with 64% for January 6-March 8, 2020. Due to COVID-19, from March 24, 2020 the contactless payment limit in the etherlands was doubled from 25 ($28.07) to 50 ($56.14), while from March 19, 2020 the cumulative contactless payment limit for one day was increased from 50 ($56.14) to 100 ($112.27).
Reasons to Buy
- Make strategic decisions using top-level revised forecast data on the Dutch payment industry.
- Understand the key market trends, challenges, and opportunities in the Dutch cards and payments industry.
- Receive a comprehensive insight into payments market in the Netherlands.
Total Payment Cards Market vs. Pre-COVID-19 Forecasts
Debit Cards Payment Market vs. Pre-COVID-19 Forecasts
Credit and Charge Cards Payment Market vs. Pre-COVID-19 Forecasts
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